Substitutes or complements? Use of trade credit and bank credit by family SMEs

Xianzhe Jin, Jialong Li, Yefeng Wang and Yuan Wang

The British Accounting Review, 2025, vol. 57, issue 4

Abstract: This research examines the intricate relationship between trade and bank credit, with a specific focus on family and nonfamily small and medium-sized enterprises (SMEs). Our analysis of a sample of 3690 US SMEs reveals a distinctive pattern: Trade credit and bank credit act as substitutes for each other for family firms, but they serve as complements to each other for nonfamily firms. Furthermore, our findings highlight that this distinctive pattern is particularly pronounced in the contexts of low-performing SMEs and smaller SMEs. The results provide a nuanced understanding of the relationship between trade and bank credit and underscore the importance of considering the impact of a governance structure on an SME's financing behaviors.

Keywords: Trade credit; Bank credit; Family ownership; Agency theory; Small and medium-sized enterprises (SMEs) (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0890838924002282
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:57:y:2025:i:4:s0890838924002282

DOI: 10.1016/j.bar.2024.101464

Access Statistics for this article

The British Accounting Review is currently edited by Nathan Lael Joseph and Alan Lowe

More articles in The British Accounting Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().